We were told that a switch from the paper tax disc to an online system in 2014 would save the government £10 million a year – but official figures today show that it’s cost the Treasury £107million in 2017 as three times as many drivers are evading the fee.

The Department for Transport confirmed that 1.8 per cent of vehicles, the equivalent of 755,000 cars, motorcycles and vans, are untaxed this year – that’s compared to just 0.6 per cent in 2013, before the paper tax disc was abolished.

In fact, more motorists are evading Vehicle and Excise Duty today than they have done for a decade and 83,000 haven’t taxed their car for more than a year.

Car tax evasion rising since tax-disc abolishment: More drivers are dodging VED car tax in 2017 than they have done in any year for a decade, the Department for Transport confimed

Official figures showed that vehicle tax evasion has increased from 1.4 per cent in 2015 – the last time the data was collated – to 1.8 per cent this year.

The DfT admitted that the jump in tax dodgers ‘could be due to the effect of major changes to the vehicle licensing system which took place in 2014’.

But motoring bodies are in no doubt that the shift from a paper-based system to an online setup – a switch-over that cost £1million three years ago – is primarily to blame.

RAC public affairs manager Nicholas Lyes said: ‘Clearly, since the tax disc was abolished in 2014 there has been a significant increase in untaxed vehicles on our roads, with the figure now in excess of three-quarters of a million.

‘The Treasury noted that abolishing the paper tax disc would save £10m, however it is now seems the changes are proving extremely costly.’

Both the DfT and the RAC concluded that the visual reminder of a tax disc was an effective way to prompt drivers into renewing their car tax.

FIgurs show that since the tax disc was replaced with an online system in 2014, car tax evasion has been on the rise

First introduced in 1921, the tax disc was abolished in October 2014.

But despite the government’s defence that all vehicle owners are sent renewal reminders, it appears that more motorists are now prepared to try their luck to see if they can get away without paying at all.

Steve Gooding, director of motoring research charity the RAC Foundation, said: ‘While no-one likes forking out for taxes, at least the proceeds of this one will be spent benefiting those who pay it.

‘Surely we don’t have to go back to the days of printed paper and post office queues to encourage all motorists to contribute their share?’

Some 52% of untaxed cars have been unlicensed for up to 2 months. However, a staggering 11% have been unlicensed for over a year

Another issue raised by the stats is the confusion surrounding car tax when a vehicle changes hands.

A third of untaxed vehicles counted by the DfT were those that had been bought by new owners.

With the 2014 changes dictating that vehicle tax no longer carries over to the new owner, many motorists could simply be unaware that they are obliged to pay.

This non-transferability of tax when vehicles swap hands has already come under strong criticism from motorists.

The original keeper now has to now claim back the remaining unused tax – though only from the beginning of a new month – while the new owner has to ensure they have paid the VED fee before using their newly-purchased car.

It means the same car could be taxed by two people for up to a month – a move that’s estimated to earn the government £40 million a year.

When the government confirmed the switch from the paper tax disc – first introduced in 1921 – to an online system, it said it would save £10million a year

The switch to this new online car tax system in October 2014 cost a reported £1m. And in 2017 it has cost the government £107m

According to the figures, more than half (52 per cent) of untaxed vehicles had been unlicensed for up to two months.

However, a significant 11 per cent – which represents around 83,000 vehicles – had been untaxed for more than a year.

‘More must be done to educate drivers about how and when to tax their vehicle, coupled with stronger enforcement to genuinely make drivers who evade vehicle tax feel that they are going to get caught.

Drivers in the West Midlands and North East were more likely to be evading car tax

‘From 2020, Vehicle Excise Duty receipts will also directly fund improvements to our strategic road network, so it is vital every effort is made to make sure we tackle evasion so our road network does not lose out on essential investment.’

The West Midlands and the North East showed the highest rates of evasion, with 2.1 per cent and 2.0% of drivers in the areas skipping paying for tax.